Just one day after the company posted pretty terrible quarterly earnings (“Net loss $157 million, loss per share $0.21, operating loss $131 million"), followed by a 16 percent drop in the company's stock price and job cuts of 1,800 (15 percent of its global workforce), two financial analysts have now downgraded the company. It certainly doesn’t help things that the company’s CFO resigned abruptly last month, either.

“Our last tiny bit of conviction is, at long last, depleted,” adding, “We have no further confidence that any aspect of our prior structural thesis (margin accretion, cash flow, and balance sheet deleveraging) will play out in the foreseeable future.”

The kicker? “Frankly, the most common adjective that comes up when we discuss the company with clients is, simply, ‘un-investable.’"

Cyrus Farivar
Cyrus is the Senior Business Editor at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

180 Reader Comments

That's certainly a sad bit of news to hear. I had hoped they'd be able to recover from their backslide but that doesn't seem very likely now if they've laid off 15% of their workforce and are operating in the red

It will be sad if they go under. Unfortunately I won't be suprised. They really have not had a hit since 2004 or so, and post Core2 it got tougher and tougher to reccomend them. I still use them for my builds when I can justify it, but that is becoming less and less the case.

If they go down, I hope ARM can given Intel at least a little competition. In a way, Intel owes AMD rather a lot, they probably would not have come up with something like the original Core arch without AMD wiping the floor with the Pentium 4. Ironic that part of the reason AMD is having so much trouble is they tried to create their own P4 with Bulldozer.

Part of this is AMD's marketing. They simply don't do anywhere near enough when compared with Intel. Intel is a household name... AMD is not.

Do you really think that would help? I hear about AMD all the time from reading ars, and that's a major reason I opted for Intel/Nvidia with my latest pc build. When learning more about the product makes someone less likely to buy it, more advertising is probably not the right answer.

It will be sad if they go under. Unfortunately I won't be suprised. They really have not had a hit since 2004 or so, and post Core2 it got tougher and tougher to reccomend them. I still use them for my builds when I can justify it, but that is becoming less and less the case.

Was going to post something similar but was ninja'd. Yeah, ever since the Core2 Duo came out (or pentium D for the more esoteric techs), with it's value and performance, coupled with extremely low wattage ratings (for the time), they became a back burner recommendation for me. Keep in mind that earlier I always championed AMD prior to that, but given Intel's quantum jump into a far superior product line, they've taken the lead and kept on running. AMD stumbled and lost the initiative.

Having their own Desktop chip fab would allow them to drop Intel (surely a large cost for licensing) and still maintain x86 compatibility for windows support.

AMD is fabless, has been for a couple of years. But they do still own the x86-64 ISA extensions, which Intel needs for 64-bit CPUs that aren't Itanium. They also own ATI and their graphics IP. Still, it's doubtful Apple would buy them.

Extremely unlikely. Apple is moving more and more towards ARM (with some people, like Charlie Demerjian, predicting a move to ARM for Macbooks as well). If anything, they should buy shares from a fab. TSMC sounds good and if AMD goes down the drain, Global Foundries would also be an option.

Unfortunately, I think this was inevitable. Intel went down the wrong road with Itanium, and AMD was able to capitalize and beat Intel at their own game for a number of years. Once Intel woke up and brought their full resources to bear on x86-64, it was just a matter of time before they ran AMD into the ground. It's a shame, less competition can only mean higher prices.

I don't think so, ATI was struggling against nvidia before AMD bought them, and they only really have the desktop cards to rely on - they've not got an equivalent to nvidia's tesla cards which are very high margin and the desktop graphics cards are slowly getting eaten by integrated graphics (intel's HD3000 and HD4000 are more than good enough for desktop users and even some gaming) and the move to laptops, tablets and phones.

The new trinity chips aren't bad on a price per dollar, but are stuck at such low prices that it doesn't really help AMD.

Having their own Desktop chip fab would allow them to drop Intel (surely a large cost for licensing) and still maintain x86 compatibility for windows support.

I think Apple learned their lesson about trying to compete with Intel on chip fabrication. Licensing? What do you even mean by that?

Intel is years ahead of everyone else in fabrication technology/techniques and power consumption(for x86 chips but very important for Macbook Air products). I don't think Apple could hope to make comparable chips cheaper than they are buying them from Intel.

Sad to hear but they've made some huge mistakes. They completely missed mobile and blew their latest architecture. It takes tremendous resources to produce desktop and server processors and it takes huge revenue to sustain that. Unfortunately once you blow it it's hard to get back on track. It's unlikely they have the resources to dig themselves out of the hole they're in.

Again it's sad. My first home-built college computer was AMD 10 years ago when they were at their best.

Well, that was more tongue-in-cheek than anything - analysts' predictions are not exactly gospel. Witness the number of analysts who predicted the death of Apple in the nineties.

That said, it wouldn't be completely absurd, either. Apple has started doing their own chip design, after all. And they're a hardware company with a mountain of cash on hand; it might make sense to cut out the middleman if they can acquire enough of AMD for little enough money.

I've only got about $40 invested in them, but I really should have cashed out a few years ago when the stocked peaked after the 2008 market meltdown. I bought near bottom, so for a short time I actually had a pretty decent profit percentage wise. Oh, well. Buy and hold seemed like a good idea at the time.

Sad news indeed. Unfortunately they just haven't been able to keep up with Intel in the high end, and their low end/value market is being devoured by ARM.

On the video card front - they face heavy competition from not only nVidia (who is also branching out from the strictly discrete graphics cards), but comparable Intel integrated video solutions.

Nvidia isn't doing too hot either when it comes to branching. ATI also could really make a name for themselves with 2012 really being the year of all things video. Remember when ATI use to make the All in One Wonder cards? What is everyone tackling this year including Apple? TV!

AMD has gained ground the past year in the discrete graphic card market, they've got about 40%.

I'm still running all AMD cpu's, but that's just because I haven't refreshed any of my rigs in last couple years. Their A-series APU's seemed promising, but didn't really take off, and Intel's onboard video is sufficient for the vast majority of people.

I hope they can streamline/restructure and come back from this, would love to see them competitive again in the cpu market.

Their discrete GPU's are still the best price/performance, and price/watt on the market, but I suppose that that's a small enough market that it can't buoy up the rest of the AMD ship. Seems like buying ATI was the best thing to happen to AMD in years, and the worst thing to happen to ATI.

The newest CPU architecture does look nice, and it is very competitive, but it's not one of those high margin parts that makes a company a ton of money. Hopefully they stick around long enough to really work out their Fusion line. Where they're going with their chips is interesting and it would be nice to see it go from just being competitive to being a real force in the industry.

I'm only sad about cheap decent chips. Intel is awesome, but when it comes to cheap the cheapest Intel is still 50% more expensive than AMD. This year I was building my home NAS server and Intel processor and MB would have costed me around 50% more than AMD.

But, on the other hand ARM is getting better every day, so maybe in the future ARM processors will replace AMD. Every big company has to have an end sometime.

amd was not rolling in money like y'all think. in fact they only did marginally better than today, they never even made (or hit) 2 billion+ in revenue; during any given quarter. the highest quarterly profit amd made during that time was around 200mln, intel on the other hand made well over 5bln in profit per quarter. the dynamics have not changed all that much.

anti amd article on ars, surprise surprise; ars smelled amd blood and decided to swim in it, you guys are becoming more pathetic each day.

Unfortunately, I think this was inevitable. Intel went down the wrong road with Itanium, and AMD was able to capitalize and beat Intel at their own game for a number of years. Once Intel woke up and brought their full resources to bear on x86-64, it was just a matter of time before they ran AMD into the ground. It's a shame, less competition can only mean higher prices.

yeah thats the only reason amd failed, because intel woke up....."rolls eyes". if you cant make enough money on your product, then you cant invest in new products.

amd was not rolling in money like y'all think. in fact they only did marginally better than today, they never even made (or hit) 2 billion+ in revenue; during any given quarter. the highest quarterly profit amd made during that time was around 200mln, intel on the other hand made well over 5bln in profit per quarter. the dynamics have not changed all that much.

How does a company get 5 Billion in profit, and yet everyone complains about them being more expensive than AMD?

I know the reasons for AMD to get rid of its fabs, becoming a fabless IP company but I always thought that was a big mistake on their part. Relying on those third party companies to keep up with intel, was a mistake. In addition the cost savings just are not there, not with the lack of control over quality, so their yields have suffered. I posit that one of the reasons Power still has relevance is because IBM controls the materials process tech it uses for its production. There are other issues with the way AMD handled its business as well as R&D that I had trouble with, but the above is the one that made me bail from their stock.

I think MS would be a better suitor. BTW are the deals with MS/Sony/Nintendo for APU/ Graphics components being considered in the financial forecast? I know the margins probably aren't that high, but probably good for a couple of billion over the next 5 years or so.

amd was not rolling in money like y'all think. in fact they only did marginally better than today, they never even made (or hit) 2 billion+ in revenue; during any given quarter. the highest quarterly profit amd made during that time was around 200mln, intel on the other hand made well over 5bln in profit per quarter. the dynamics have not changed all that much.

How does a company get 5 Billion in profit, and yet everyone complains about them being more expensive than AMD?

when amd had superior products, intel blocked them from the market place. amd never made massive amounts of money, they were never able to capitalize on what they had created. imagine for a second, you put your time, and limited resources to create a product that is exceptional. now your main competitor is using bribes and threats in order to stop you from selling your product and making money, hell you cant even give away your product. so most people did not even know amd was an option.

intel has a very long past for stifling competition, amd was not the first.